High health insurance costs were a deciding factor in the Douglas County commission's rejection Monday of a cost-of-living pay increase for about 300 county employees.
For the past three years, commissioners have given county employees a 2 percent cost-of-living adjustment (COLA), and were considering a 2.5 percent increase for 2001. A COLA has been approved every year since at least 1987, said Pam Madl, the county's director of administrative services, who has kept the records since then.
Instead of giving employees raises, commissioners wondered how they can prevent health insurance costs from busting the budget. The county will spend at least $132,000 more than the budgeted $1.4 million for health insurance costs this year, Madl said.
"It's not good news," she said. "We have had heavy utilization."
Madl said 20 insurance claims surpassed $10,000 each, and four to six claims are expected to exceed $85,000 the county's maximum limit. These claims are being paid directly by the re-insurer. She said that usually one or two claims a year exceed the maximum limit.
Madl also said she received two claims totaling $142,000 last week that caused the weekly claim average to climb to $68 from $55.
If claims continue to be high in 2001, Madl said the budget could be underfinanced by as much as $700,000. Commissioners allocated $1.9 million for health insurance costs for next year.
Commissioner Charles Jones suggested that county employees should contribute some money to the insurance costs. The county currently pays $200 per month toward individual insurance premiums. Employees pay $131 to insure a spouse or child, or $200 to insure a family.
"Someone is going to get hurt," he said. "Either the general fund is going to get whacked with a lot of money, or we're going to increase premiums substantially, or the COLA will be eliminated completely."
County Administrator Craig Weinaug said commissioners must discuss their options, and wait and see if the trend continues.
Commissioner Dean Nieder said that he wasn't sure what the best solution was for the insurance costs, but that he didn't want to make a decision that would cause employees to quit.
"I don't think they should be penalized too badly, but I think they have to realize what the subsidy is," he said.
Commissioners appointed Commissioner-elect Bob Johnson, who worked in insurance for more than 30 years, to meet with a group of county employees to discuss health insurance concerns.